Garden Duty produces shovels and rakes. Sales and costs for the most recent year
ID: 2425442 • Letter: G
Question
Garden Duty produces shovels and rakes. Sales and costs for the most recent year are indicated below:
Shovels Rakes Total
Units 8,000 20,000 28,000
Sales revenue $160,000 $40,000 $200,000
Variable costs 98,000 18,000 116,000
Fixed costs 28,000 12,000 40,000
Profit $ 34,000 $10,000 $ 44,000
The number of units and selling price per unit of both products appears to be stable for the foreseeable future. How much is the weighted average contribution margin per unit?
A. $4.43
B. $3.00
C. $1.57
D. $0.42
Explanation / Answer
Shovels Rakes Total
Units 8,000 20,000 28,000
Sales revenue $160,000 $40,000 $200,000
Variable costs $ 98,000 $18,000 $116,000
Contribution $62,000 $22,000 $84000
Fixed costs 28,000 12,000 40,000
weighted average contribution margin per unit = contribution / units
= (62000+ 22000) / (8000+20000)
= $ 3
ASNWER = B $3
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.